IN the wake of volatile fuel prices, the government has outlined measures currently being undertaken to encourage the use of natural gas, including addressing tax issues in efforts to lower the cost of converting vehicles from gasoline consumption to compressed Natural Gas (CNG).
Minister for Energy January Makamba said on Friday that the government is engaging private sector so that it can invest in CNG infrastructure to make the service available across the country.
According to statistics charges for converting gasoline vehicles to CNG ranges between 1.5m/- and 2m/-.
He said the use of gas in vehicles and industries will not only create jobs and promote businesses but also will be a remedy to inflation brought about by soaring fuel prices.
The government has set aside budget in this financial year for creating public awareness about the use of natural gas especially in converting their vehicles to CNG.
We are also engaging private sector so that they can help to extend the services to other parts of the country by installing the needed infrastructure,” Makamba said in Dar es Salaam during the CEO Roundtable of Tanzania.
The discussion was focused on the role of private sector participation in current and projected energy projects.
The minister said that the government is also aware of the high cost of converting vehicles from gasoline consumption to compressed Natural Gas (CNG), noting that the next step will involve addressing financial and tax issues in order to reduce the cost of equipment needed for installing the system.
He said the government will also engage financial institutions so that they can provide loans to enable local investors to execute the projects. “We are proceeding well on this and it is my expectation that we will have more investors in the energy sector in the near future.”
For his part, CEOrt Chairman Mr David Tarimo expressed gratitude to the government noting that more than 200 member organisations are looking forward to enhancing collaboration with the government on engagement to further explore the role of energy in driving the sustainable sector.
Tanzania’s natural gas reserves are estimated at 57 trillion cubic feet with a total annual production of 110 billion cubic feet from three fields: Songo Songo, Mnazi Bay, and Kiliwani North while other logistics investments are in the pipeline.
Dar es Salaam city is estimated to have more than 1,000 vehicles converted to compressed natural gas (CNG) while the city has three different CNG filing stations.
Speaking recently during an online meeting held to discuss the use of alternative sources of energy in motor vehicles Permanent Secretary of the Ministry of Energy, Eng Felchesmi Mramba said “Use of CNG is more economical compared to petrol and diesel as natural gas costs a lot less than the two fuel types. The government continues to encourage Tanzanians to opt for it since the price of fuel on the global market is still high,” he added.
Even though natural gas is also a nonrenewable resource, and does pollute the environment, it is safer than both petrol and diesel for the planet because natural gas sends 25 per cent less carbon dioxide into the atmosphere.
According to Pan African Energy Tanzania Limited (PAET), the subsidiary of Orca Energy, motorists can absorb shocks of the rising fuel prices by increasing the use of compressed natural gas (CNG) in vehicles.
“We think there is still huge untapped domestic market to focus particularly the gas-powered vehicles which are cost-efficient with low emissions,” PAET Managing Director, Andrew Hanna said.
He said however that this is an area that needs huge investment to make sure CNG for use in vehicles is made available in different parts of the country.
He said there is a need to build a huge network of retail gas stations across the country for which motorists can easily refuel their vehicles.